Reported from the Committee on Ways and Means March 31, 2005 with recommendation that House Committee Substitute for
House Bill No. 461 Do Pass. Referred to the Committee on Rules pursuant to Rule 25(26)(f).

Reported from the Committee on Rules April 4, 2005 with recommendation that House Committee Substitute for House Bill No.
461 Do Pass with no time limit for debate.

Taken up for Perfection April 11, 2005. House Committee Substitute for House Bill No. 461 ordered Perfected and printed.STEPHEN S. DAVIS, Chief Clerk

0735L.06P

AN ACT

To repeal section 137.078, RSMo, and to enact in lieu thereof three new sections relating to
assessment of business personal property.

Be it enacted by the General Assembly of the state of Missouri, as follows:

Section A. Section 137.078, RSMo, is repealed and three new sections enacted in lieu
thereof, to be known as sections 137.078, 137.079, and 137.122, to read as follows:

137.078. 1. For purposes of this section, the following terms shall mean:

(1) "Analog equipment", all depreciable items of tangible personal property that are used
directly or indirectly in broadcasting television shows [and], radio programs, or commercials
through the use of analog technology, including studio broadcast equipment, transmitter and
antenna equipment, and broadcast towers;

(2) "Applicable analog fraction", a fraction, the numerator of which is the total number
of analog television sets in the United States for the immediately preceding calendar year and the
denominator of which is an amount representing the total combined number of analog and digital
television sets in the United States for the immediately preceding calendar year. The applicable
analog fraction will be determined on an annual basis by the Missouri Broadcasters Association;

(3) "Applicable analog percentage", the following percentages for the following years:

Year2004200520062007

of AcquisitionTax YearTax YearTax YearTax Year

1%

20061%

200525%1%

200450%25%1%

200375%50%25%1%

200275%50%25%1%

200175%50%25%1%

200075%50%25%1%

199975%50%25%1%

199875%50%25%1%

Prior75%50%25%1%;

(4) "Applicable digital fraction", a fraction, the numerator of which is the total number
of digital television sets in the United States for the immediately preceding calendar year and the
denominator of which is an amount representing the total combined number of analog and digital
television sets in the United States for the immediately preceding calendar year. The applicable
digital fraction will be determined on an annual basis by the Missouri Broadcasters Association;

(5) "Broadcast towers", structures with a function that includes holding television
or radio broadcasters' antennae, repeaters, or translators at the height required or needed
to transmit over-the-air signals or enhance the transmission of the signals. This term also
includes the structures at least partially used by television broadcasters or radio
broadcasters to provide weather radar information to the public. For property tax
assessment purposes, broadcast towers are classified as tangible personal property;

(6) "Digital equipment", all depreciable items of tangible personal property that are used
directly or indirectly in broadcasting television shows [and], radio programs, or commercials
through the use of digital technology, including studio broadcast equipment, transmitter and
antenna equipment, and broadcast towers;

(7) "Radio broadcasters", all businesses that own, lease, or operate radio
broadcasting stations that transmit radio shows and commercials and that are required to
be licensed by the Federal Communications Commission to provide such services;

[(6)](9) "Television broadcasters", all businesses that own, lease, or operate television
broadcasting stations that transmit television shows and commercials and that are required to be
licensed by the Federal Communications Commission to provide such services;

(11) "Transmitter and antenna equipment", equipment with functions that include
transmitting signals from broadcast studios by increasing the power, tuning signals to the
frequency allowed by regulatory authorities, and broadcasting signals to the public for
television broadcasters or radio broadcasters;

(12) "Studio broadcast equipment", studio equipment that receives, produces,
modifies, controls, measures, modulates, adds to or subtracts from, or enhances signals in
the process that results in over-the-air signals for television broadcasters or radio
broadcasters.

2. In response to recent action by the Federal Communications Commission, as described
by the commission in the fifth report and order, docket number 97-116, for purposes of assessing
all items of television broadcasting equipment that are owned and used by television broadcasters
for purposes of broadcasting television shows and commercials:

(1) The true value in money of all analog equipment shall be determined by depreciating
the historical cost of such property using the depreciation tables provided in subdivision (1) of
subsection 3 of this section and multiplying the results by the applicable analog percentage. The
result of the second computation is multiplied by the applicable analog fraction to determine the
true value in money of the analog equipment; and

(2) The true value in money of all digital equipment shall be determined by depreciating
the historical cost of such property using the depreciation tables provided in subdivision (2) of
subsection 3 of this section and multiplying the results by the applicable digital fraction to
determine the true value in money of the digital equipment.

3. For purposes of subsection 2 of this section, the depreciation tables for determining
the [fair] true value in money of television broadcasting equipment are as follows:

(1) For analog equipment, the following depreciation tables will apply for the following
years:

Year2004200520062007

of AcquisitionTax YearTax YearTax YearTax Year

200665%

200565%45%

200465%45%30%

200365%45%30%20%

200245%30%20%10%

200130%20%10% 5%

200020%10% 5% 5%

199910% 5% 5% 5%

1998 5% 5% 5% 5%

Prior 5% 5% 5% 5%;

(2) For digital equipment, the following depreciation tables will apply for the following
years:

Year2004200520062007

of AcquisitionTax YearTax YearTax YearTax Year

200665%

200565%45%

200465%45%30%

200365%45%30%20%

200245%30%20%10%

200130%20%10% 5%

200020%10% 5% 5%

199910% 5% 5% 5%

1998 5% 5% 5% 5%

Prior 5% 5% 5% 5%.

4. Beginning January 1, 2008, for purposes of assessing all items of television
broadcasting equipment that are owned and used by television broadcasters for purposes
of broadcasting television shows and commercials, the following depreciation tables will
be used to determine their true value in money. The percentage shown for the first year
shall be the percentage of the original cost used for January first of the year following the
year of acquisition of the property, and the percentage shown for each succeeding year
shall be the percentage of the original cost used for January first of the respective
succeeding year as follows:

Year Studio BroadcastTransmitter and Broadcast Tower

EquipmentAntenna Equipment

165%91%96%

245%82%93%

330%73%89%

420%64%86%

510%55%82%

6 5%46%79%

737%75%

828%72%

919%68%

1010%65%

1161%

1258%

1354%

1451%

1547%

1644%

1740%

1933%

2030%

2127%

2224%

2321%

2418%

2515%.

Television broadcasting equipment in all recovery periods shall continue in subsequent
years to have the depreciation percentage last listed in the appropriate column so long as
it is owned or held by the taxpayer.

5. Effective January 1, 2006, for purposes of assessing all items of radio
broadcasting equipment that are owned and used by radio broadcasters for purposes of
broadcasting radio programs and commercials, the following depreciation tables will be
used to determine their true value in money. The percentage shown for the first year shall
be the percentage of the original cost used for January first of the year following the year
of acquisition of the property, and the percentage shown for each succeeding year shall be
the percentage of the original cost used for January first of the respective succeeding year
as follows:

YearStudio BroadcastTransmitter andBroadcast Tower

EquipmentAntenna Equipment

165%91%96%

245%82%93%

330%73%89%

420%64%86%

510%55%82%

65%46%79%

737%75%

828%72%

919%68%

1010%65%

1161%

1258%

1354%

1451%

1547%

1644%

1740%

1933%

2030%

2127%

2224%

2321%

2418%

2515%.

Radio broadcast equipment in all recovery periods shall continue in subsequent years to
have the depreciation percentage last listed in the appropriate column so long as it is
owned or held by the taxpayer.

137.079. Prior to setting its rates or rates as required by section 137.073, each
taxing authority shall exclude from its total assessed valuation seventy-two percent of the
total amount of assessed value of business personal property that is subject of an appeal
at the state tax commission or in a court of competent jurisdiction in this state. This
exclusion shall only apply to the portion of the assessed value of business personal property
that is disputed in the appeal, and shall not exclude any portion of the same property that
is not disputed. If the taxing authority uses a multi-rate approach as provided in section
137.073, this exclusion shall be made from the personal property class. The state tax
commission shall provide each taxing authority with the total assessed value of business
personal property within the jurisdiction of such taxing authority for which an appeal is
pending no later than August 20 of each year. Whenever any appeal is resolved, whether
by final adjudication or settlement, and the result of the appeal causes money to be paid
to the taxing authority, the taxing authority shall not be required to make an additional
adjustment to its rate or rates due to such payment once the deadline for setting its rates,
as provided by this chapter, has passed in a taxable year, but shall adjust its rate or rates
due to such payment in the next rate setting cycle to offset the payment in the next taxable
year. For the purposes of this section, the term "business personal property", means
tangible personal property which is used in a trade of business or used for production of
income and which has a determinable life of longer than one year except that supplies used
by a business shall also be considered business personal property, but shall not include
livestock, farm machinery, property subject to the motor vehicle registration provisions
of chapter 301, RSMo, property subject to the tables provided in section 137.078, or
property assessed by the state tax commission under chapters 151, 153, and 155, RSMo,
section 137.022, and sections 137.1000 to 137.1030.

137.122. 1. As used in this section, the following terms mean:

(1) "Business personal property", tangible personal property which is used in a
trade of business or used for production of income and which has a determinable life of
longer than one year except that supplies used by a business shall also be considered
business personal property, but shall not include livestock, farm machinery, grain and
other agricultural crops in an unmanufactured condition, property subject to the motor
vehicle registration provisions of chapter 301, RSMo, property assessed under section
137.078, or property assessed by the state tax commission under chapters 151, 153, and
155, RSMo, section 137.022, and sections 137.1000 to 137.1030;

(2) "Class life", the class life of property as set out in the federal Modified
Accelerated Cost Recovery System life tables or their successors under the Internal
Revenue Code as amended;

(3) "Economic or functional obsolescence", a loss in value of personal property
above and beyond physical deterioration and age of the property. Such loss may be the
result of economic or functional obsolescence or both;

(4) "Original cost", the price the current owner, the taxpayer, paid for the item
without freight, installation, or sales or use tax. In the case of acquisition of items of
personal property as part of an acquisition of an entity, the original cost shall be the
historical cost of those assets remaining in place and in use and the placed in service date
shall be the date of acquisition by the entity being acquired;

(5) "Placed in service", property is placed in service when it is ready and available
for a specific use, whether in a business activity, an income-producing activity, a tax-exempt activity, or a personal activity. Even if the property is notbeing used, the property
is in service when it is ready and available for its specific use;

(6) "Recovery period", the period over which the original cost of depreciable
tangible personal property shall be depreciated for property tax purposes and shall be the
same as the recovery period allowed for such property under the Internal Revenue Code.

2. To establish uniformity in the assessment of depreciable tangible personal
property, each assessor shall use the standardized schedule of depreciation in this section
to determine the assessed valuation of depreciable tangible personal property for the
purpose of estimating the value of such property subject to taxation under this chapter.

3. For purposes of this section, and to estimate the value of depreciable tangible
personal property for mass appraisal purposes, each assessor shall value depreciable
tangible personal property by applying the class life and recovery period to the original
cost of the property according to the following depreciation schedule. The percentage
shown for the first year shall be the percentage of the original cost used for January first
of the year following the year of acquisition of the property, and the percentage shown for
each succeeding year shall be the percentage of the original cost used for January first of
the respective succeeding year as follows:

YearRecovery Period in Years

357101520

175.0085.0089.2992.5095.0096.25

237.5059.5070.1678.6285.5089.03

312.5041.6555.1366.8376.9582.35

45.0024.9942.8856.8169.2576.18

510.0030.6348.0762.3270.46

618.3839.3356.0965.18

710.0030.5950.1960.29

821.8544.2955.77

915.0038.3851.31

1032.4846.85

1126.5742.38

1220.6737.92

1315.0033.46

1429.00

1524.54

1620.08

1720.00

Depreciable tangible personal property in all recovery periods shall continue in subsequent
years to have the depreciation factor last listed in the appropriate column so long as it is
owned or held by the taxpayer. The state tax commission shall study and analyze the
values established by this method of assessment and in every odd-numbered year make
recommendations to the joint committee on tax policy pertaining to any changes in this
methodology, if any, that are warranted.

4. Such estimate of value determined under this section shall be presumed to be
correct for the purpose of determining the true value in money of the depreciable tangible
personal property, but such estimation may be disproved by substantial and persuasive
evidence of the true value in money under any method determined by the state tax
commission to be correct, including, but not limited to, an appraisal of the tangible
personal property specifically utilizing generally accepted appraisal techniques, and
contained in a narrative appraisal report in accordance with the Uniform Standards of
Professional Appraisal Practice or by proof of economic or functional obsolescence or
evidence of excessive physical deterioration. For purposes of appeal of the provisions of
this section, the salvage or scrap value of depreciable tangible personal property may only
be considered if the property is not in use as of the assessment date.

5. This section shall not apply to business personal property placed in service
before January 2, 2006.